2016 bitcoin price prediction by a bitcoin expert Alex Fortin

There are a few factors that will greatly affect the price of bitcoins in the near future. The upcoming global recession and the multiple applications of the Bitcoin Blockchain are the most important ones. Let’s look at each one of those factors and look at my 2016 bitcoin price prediction.

Cyclical Recession

We are coming to a recession. Raul from RealVisionTv, says that the next recession could begin in Q3 of 2016. This is in line with a lot of voices, like David Stockman, who warn us of an imminent bubble burst in the global market.

Screen Shot 2016-07-07 at 1.30.54 PMThe S&P500 and the Nasdaq has flattened out over the past year. We are clearly at the top of a bubble. The bubble was created by the FED Quantitative easing policy and by keeping the interest rate at zero for the past 8 years. We are in for a much bigger bust than 2008 and it could be the biggest recession we have seen in a long time.

Screen Shot 2016-07-07 at 1.47.44 PMThe interest rate has been kept at this artificially low rate for 8 years now. I remember when I was in high school, my teacher used to talk about when interest rates were double digit and people would actually get rich saving money in their bank accounts.

Since my generation hit the workforce in 2008, I have only seen a ridiculously low interest rate. Our generation is being penalized if we try to save.

So we are at the top of a bubble that has been created by an artificially low interest rate and wasteful quantitative easing. By trying to get the economy back on track in 2008, they actually created a much worst bubble, which we are now facing. Now the FED cannot reduce the interest rate any lower to “save” the economy. They are effectively out of ammunition.

Value will come down across the board

In a recession all the inflated assets go down in value. Stock markets, real estate and commodities (other than precious metals) will go down.

So where does all this money will go? When people wake up with a 15% slash in their portfolio, they will panic and add even more selling pressure to the market.

Money will flow from underperforming assets to safer asset classes. This is how the next biggest transfer of wealth will happen.

So early adapters, who already have accumulated a position, will see their investment multiply in value as people rush in. Gold, silver and bitcoins should all go up in value.

Gold vs Bitcoin

Gold has a bad history when it comes to government controlling its flow and even forbidding ownership. In the US, there was a time where owning gold was illegal. Those things only happen during time of financial crisis. So owning gold inside the US is a risky choice, owning gold in an offshore company, perhaps in Singapore or Switzerland, who have an history of economical freedom, is a safer bet.

In contrast to gold, bitcoins cannot be confiscated. Once you memorize your key, no one can access your bitcoins without your full consent. In fact it can be impossible for someone to know that you even own bitcoins.

When an economy goes south like we have seen in China, Russia and Venezuela, people will find ways to move their hard earned money across borders before it loses all its value. Bitcoin makes it possible to transfer large sums of money instantly across borders without any restriction.

Why I think that Bitcoin will go to the 3000$ level.

It has proven a great store of value with an annualized return of 82% since 2013. The bitcoin has outperformed all other investments over the past 5 years. Starting at a few cents, it is now worth $620 as of today.

Bitcoin is a currency and a commodity. The currency, the Bitcoin, is being used for transactions between people. It gains more value as more people use it. But the real value comes from the secure Blockchain on which the Bitcoin network is.

There is 500 times more computing power securing the bitcoin network than google and 10,000 banks combined.

The public ledger that Bitcoin uses to settle all the transactions on the network is where all the value of bitcoins comes from. You can use the ledger for financial transactions, like it is being used right now, but you can do much more.

For example, you can attach to a small fraction of a bitcoin – worth even just a few cents – some data, and use the Blockchain to record the transfer of ownership of real estate or any other assets.

When the Internet started, it was only intended to send email. Now the Internet is used for everything and has a much bigger impact than we could have imagined.

This is the first time in history that it has been possible to have a decentralized public ledger that records transactions and that cannot be changed. It was a problem that a lot of people tried to crack until Satoshi Nakamoto came up with the answer: Bitcoin.

The value of bitcoins is derived not only from the currency itself, but from the Blockchain technology that is securing the transactions. As people find more uses for it, its value will keep climbing.

Bitcoin has the power to disrupt all industries, and this is why I am so bullish on it. The upcoming economic collapse will certainly bring the value of the bitcoin to new highs.

Tim Draper, the well-known investor, put a value of $10,000 per bitcoin within the next 3 years. I agree with Tim, my 2016 bitcoin price prediction is $1200+ before the end of the year.
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